Energy Economics: A Place for Energy Poverty in the Agenda?

Abstract

The global energy system faces three major strategic challenges in the coming decades: the growing risk of disruptions to energy supply; the threat of environmental damage caused by energy production and use; and persistent energy poverty. The first two challenges have attracted a lot of attention from the energy-economics community, much less so the need to address the problem of energy under-development. On current trends, the number of people in poor countries relying primarily on traditional biomass for their energy needs will continue to rise, while the number lacking access to electricity will barely fall. To change this course, decisive policy action is needed urgently as part of the broader process of human development. Meeting basic human needs, such as food and shelter, must be at the heart of any strategy to alleviate poverty. Modern energy services help enable those needs to be met. In practice, concrete improvements in human welfare can be realised quickly at modest short-term cost. Strong political will and commitment on the part of the governments of the world’s poorest countries will be crucial. Rich industrialised countries have an important role to play in this process too. In addition to moral issues involved, we have obvious long-term economic, political and energy-security interests in helping developing countries along the path to energy development. The cost of providing assistance to poor countries may turn out to be far less than that of dealing with the instability and insecurity that poverty creates.